six but right now in the aggregate and they tell us we should look at the aggregate and the aggregate of all of these uninsured people are increasing the family premium converse says by a thousand dollars a year those people are in commerce. they are making decisions that are effecting the price that really pays for the service. >> with all due respect don't think that is a limiting principle. my unwillingness to buy an electric car is forcing up the price of an electric car. if only more people demand for electric cars it could be the economy of scale -- >> when you go to an emergency room, when you go to the doctor even if you can't pay for it. so the difference between your hypothetical and the real case is the problem of the

uncompensated care. >> first of all, i do think it is not the only place where there is uncompensated care. if somebody goes on welfare i'm going to end up paying for that as well but let me also say that there is a real disconnect them between the focus on what makes this different and the statute that the congress past. if all they are concerned about is the cost sharing that took place because uncompensated care in emergency rooms pays only we have before us the statue that only address the emergency care and catastrophic insurance coverage. because fer is everything. that gets at the idea that there's cost shifting that's going on here emergency care somebody gets sick it's going to shift the cost back to other policy theories the there's a cost shift going on when you force of the people into an insurance market precisely because they are healthy precisely because they are not

likely to go to the emergency room. they're forced to buy in the health care insurance that is a windfall but it was the price of the premiums come and again, this isn't just a lawyer appear telling you that is what it does and trying to second-guess the congressional economic decisions the findings on 43 a. >> that sounds like you are debating the merits of the bill. you ask for limiting principal so we don't get into the matter that i think has nothing to do with this case. the limiting principles that you have heard, first the solicitor general came up with a couple joined very narrow. you have seen and lopez the court says congress cannot get into the local affairs particularly when they are non-commercial come in and of course the greatest limiting the principal of all which not many people accept so i'm not going to emphasize that is the

limiting the principal to drive from the fact that members of congress are elected from the state and 95% of all of the united states is state law. that is a principal enforced by the legislature. the other two are the principles one written into lopez and the one you just heard. it seems to me all of those and none of them either eliminate the possibility that we are trying to take the 40 million people who do have the medical cost we do affect interstate commerce and provide a system that you may like or not liked. it's up to commerce at least the commerce clause, so that isn't a limit in principle. second of all -- it is the power to regulate, the power like all others vested in

congress has completed a self, made the exercise to its utmost extent and acknowledges know the limitations of the than those prescribed in the constitution, but there is no conscription set forth in the constitution with regulating commerce. >> i agree 100% and that is the chief justice's plight once you open the door to compelling people into commerce based on the narrow rationale that exists in the industry you are not going to be able to stop that process. >> i would like to hear you address justice breyer -- >> the other principals are lopez, and this case is not -- it is a lawyer met on the affirmative exercise of people who are already in commerce. the question is is there any other limit to people who are not and the commerce. so this is the case that asks that question and the first point which is i take it the solicitor general's point is all

the insurance market itself a limiting principle. it's the justification for why this is a foul the regulation of commerce. these are economic decisions that have an effect on other people my failure to purchase market has a direct effect on others already in the market that's true of virtually every other market. europe absolutely right you are in the commerce power it isn't going to police that except maybe to the lopez limit and that is exactly why i think it's very important for the court to think seriously about taking an unprecedented step the commerce power not only includes the power to regulate but prescribe the rules by which the commerce is governed. it is the power to compel people to enter into commerce in the first place.

it's not structured as a tax if it's any tax at all it is a direct tax walls number for the framers would have had no doubt tax on not having something is not an excise tax but a forbidden tax and one reason why this is not proper legislation because it is -- and violates that. the second thing is i would urge you to renew the license tax case which the solicitor general says it is the best case where you ignore the fact that taxes dominated into something other because that is a case where the argument was because the federal government had passed the elections and not the tax but somehow that allowed people to take action that would have been unlawful under the state law that this was a special federal license to do something forbidden by the state law this court looked beyond the label in order to preserve that in there. with the solicitor general asked you to do is the opposite which is to look past the labels to upend the basic federal assist.

>> do you think the states could pass this mandate? >> i represent 26 states but i do think the states could pass this mandate. >> is there any other area of commerce business where we have felt there isn't concurrent power but in the state and the federal government to protect the welfare of commerce? >> i have to resist the premise because i didn't answer they could do that because it would be a job with the regulation of interstate commerce. i said yes the states can do it because they have a power. the states on the one hand and limited federal government on the other. >> thank you mr. comment. >> thank you mr. chief justice. may i please the court. i'd like to begin with the

solicitor general's main premise which is they can come to the purchase of health insurance to promote commerce and of markets because it will reduce uncompensated care. if you accept the argument you have to fundamentally go through the text of the constitution and give the commerce plenary power. it simply doesn't matter whether or not this regulation will promote health care commerce by reducing uncompensated care. all that matters is whether the activity actually being regulated by the act negatively affects commerce for the commerce regulation so that it is within the commerce power. if you agree with us that this is exceeds the commerce power ball doesn't somehow become redeemed because it has been official policy affects in the health care market. in other words, the congress doesn't have the power to promote commerce. the congress has the power to regulate and of the power exceeds the permissible

regulatory authority then it is in a valid. >> surely the regulation includes the power to promote since the new deal we have said there's a market agricultural product the congress has the power to subsidize to limit production, all sorts of things. estimate absolutely, chief justice. when they are acting within their enumerated power that obviously they are promoting commerce, but the solicitor general wants to turn it into a different power. he wants to say we have the power to regulate anything to promote commerce. if they have the power to promote commerce the have the power to regulate everything. >> i don't think you are addressing the main plant that they are not creating the commerce and health care. it's already there and we are all going to need some kind of health care most of us will at some point. >> i would like to address that if i could mr. chief justice. in the first place play mix and

match with the statistics and say 95% of us are in the health care market. but that is not the relevant statistics even as the government frames the issue. no one in congress and the solicitor general was arguing going to the doctor and fully paying them creates a problem. the problem is uncompensated care to read they say the uncompensated care arises if you have some kind of a catastrophe, hit by a bus, had a prolonged illness. but what is the percentage of the uninsured but has that sort of catastrophe? we know what has to be a relatively small fraction. so in other words -- >> we don't know in advance, and that doesn't change the basic principle. that you are nonetheless forcing people for paternalistic reasons to ensure against risks they face the voluntary decisions they are not going to decide not to. >> the problem is that they are making the rest of us pay for it

because as much as they say we are not in the market, we don't know when the time they will be. and the figures are how much more for insurance because people get sick. they haven't been able to meet the bill for cancer, and the rest of us are paying this and people are getting cost free health care. the only way to prevent that is to have them pay sooner rather the leader of front. islamic but my point is this with respect to justice ginsberg's conflict people who pay for it in uncompensated care >> that is entirely different group of people and entirely different activity. whether or not you can regulate activity because it has the

statistical connection to an activity that harms congress. the constitution only gives congress the power to regulate things that negatively affect commerce for the regulation. it doesn't give them the power to regulate things that are statistically connected. everything in the aggregate is statistically connected to something that affects commerce and every purchase affects commerce. >> in your view, just picking on something if it turned out there was some terrible epidemic sweeping the united states and we couldn't say that more than 40 or 50%, i can make the numbers as high as i want, but you say the federal government doesn't have the power to get people inoculated to require them to be inoculated because

that is just statistical. >> i think they must have decided that issue because people who commit violence -- >> is your answer to that yes or no? they couldn't do it. they cannot require people even if this disease is sweeping the country to be inoculated with the federal government has the power and -- okay. go ahead. >> obviously creates the same impression on fellow citizens as this communicable disease, and it has huge effects on the health care of the country. the commerce found that increased health care costs -- >> i agree with you, but the majority felt that there was a local map. the basic point is not withstanding it's a very profound effect on the health care market this court said the activity being regulated is also

of the commerce clause power. we must say no, congress doesn't have the power. why not? because everything has downstream effects on commerce and every compelled purchase promotes commerce. isn't there a difference between justice breyer's hypothetical and the law that we have before us here and his hypothetical harm to other people from the communicable disease is the result of the disease. it isn't the result of something that the government has done. but whereas here the other reason that there is cost shifting is because the government has mandated that and has required hospitals to provide emergency treatment, and instead of paying for that through the tax the would be borne by every mehdi, it has required, it set up a system in which the cost is surreptitiously shifted to people that have health insurance and pay their bills

when they go to the hospital. >> it is illogical argument to the estimate if it is so -- let me just change my example under pressure and say that in fact it turns out that 90% of all automobiles driving the interstate without certain equipment put up pollution which truffles interstate, not 100% manly 60% to as the epa have the power to say you've got to have an anti-pollution device? islamic if you are not going on statistics you are going on something else which i would like to know what it is to this committee can require you to buy a car with an anti-pollution devices. once you enter the market and made the decision they could regulate the terms and conditions of the call and for all sorts of reasons.

it's totally legitimate and that is the question when you're born and you don't have insurance and you will in fact impose cost to be a have you perhaps involuntarily perhaps simply because you are human being entered this particular market, which is a market for health care? >> if being born is entering the market that i can't think of in a plenary power congress can have, because that literally means they can regulate every human activity from cradle to grave. i thought that is what distinguished the plenary police power from the very limited commerce power. i don't disagree that if giving the commerce the plenary power to mandate transfers would be a very efficient way of helping

accomplishing the commerce objective. >> to go back to justice kagan, don't forget her question. >> i forgot my question. [laughter] >> i was facing the same dilemma. it seems strange to me we could have a social security system for all the people being forced to pay for something i don't want and it seems to me to get care for the ones who needed by having everyone in the pool but it's also trying to preserve their role for the private sector, for the private insurance. there is something very odd about that. they can take over the whole thing and that's kind.

if the government wants to preserve private insurers. >> i don't think it was constitutionality as whether it adheres to the libertarian principles of the cato institute or the status principal of someone else. i think the policy question is whether or not it is regulating things that negatively affect commerce or don't come and since obviously the failure to purchase an item does not create the kind of effect on supply and demand that the market participants did, it doesn't in any way of interfere with the regulation i don't think that it can pass -- >> i thought you must buy. they aren't going to let you use dubai that wheat that you don't want. >> let's be careful what they are regulating with. what they are regulating with is the supply. it didn't imply that they would

require every american to go out and buy a week. yes one of the consequences of regulating the local market participants is that it will affect the supply and the demand for the product. that's why you can regulate them because the local market participants have the same effect on the interstate market that the black market has on the legal market but none of that is true. you can regulate the local bootleggers but that doesn't suggest you can locate people who stay out of the liquor market because they don't have any negative effect. only the existing market participants or regulation. >> that's why i suggested that it might be different if you are raised in of the challenge and presenting a class of people whom you could say clearly would not be in the health care market. but you are raising the challenge and we can't really know which of the many, many people that this addresses in fact we do not participate in the health care market and in

fact were not imposed the cost of the rest of us. stomachs of the question is can a congress respond to those factors that we have no crystal ball that we can't tell who is and isn't going to be in the health insurance market and say most of these people will be and most of these people will thereby imposed the costs on the rest of us and that is a problem that we can deal with on the class wide basis >> the engage in different activities which is people to on their health care payment. it's not the uninsured. under your theory you can regulate anybody if they got a statistical connection to a problem. people entered into the market and impose mortgages insurance on them we can simply impose the requirement by private mortgage insurance on everybody before they enter the market because they're doing it in this prophylactic way before it

develops. estimate cannot ever be as when to enter the mortgage markets position is that almost everybody is going to enter the healthcare market >> to place is the health insurance market different than the halter market but let me to get on false tracked. devotees in the milk and wheat product market but it doesn't suggest the government can compel me to buy 5 gallons of meat or 5 bushels of wheat because they are not regulating the congress there requiring you to make the purchase you don't want to do its treacly or indirectly by government regulation the government says fall when the colleagues example, you can't buy a car without the mission control. i don't want a car mission control. it's more efficient in terms of

the hp. but i am forced to do something i don't want to do by the government regulation. as the nicu are not forced to buy a product you don't want, and i agree with you that since the government regulates all markets, there is no limit in principal on the kunkel purchase. when they put these environmentally -- >> the force me to buy its, pasteurized goods, goods that don't have certain pesticides but do have others there is government compulsion in almost every decision because the government regulates so much. estimates the condition that some go against but -- >> let's think about it this way. when you enter the market place they can pose all sorts of restrictions on you and they could impose all sorts of exceed those on the states as the have enacted the law they can wipe out until law and condition them but what can they do? they can't compel the states to enact the law or to carry all

the federal law and i am arguing for precisely the same distinction because everybody intuitively understand that regulating participants after they entered into a contract is fundamentally a less intrusive than requiring -- >> we want the government to regulate the manufacturing process whether or not the goods will enter into interstate commerce merely because they might statistically. there is all sorts of government regulation of manufacturing plants, of the agricultural for arms and all sorts of activities that will be purely intrastate because it might affect intrastate activity. but i fully agree with you, justice. >> how is that different from saying you were so venturing today, you are forgoing insurance. why isn't that a predecessor to

the need that you are eventually going to have? >> the cases that you've referred to i think effectively eliminated the distinction between participants in the intrastate market, participates in the intrastate market. none of the cases suggest you can regulate people that are outside of the market on both of the interest paid and interest level by compelling them to the market. >> what about the simplest counter it simple for me to suggest is you have undoubtedly read the judges concurred in defense. he has about two pages that seem to me of the samples where everyone accepts the fact that under these kind of regulations the government can compel people to buy things they don't otherwise want to buy. for a simple, he gives even in that case the farmer was being forced to go out and buy grain to feed to his animals because he couldn't raise it at home.

he goes through an exit laughter another. so what is your response to that which you have red? >> he is wrong on that date sample to be there was no compulsion for him to buy wheat to be a he could have gotten substitutes were not sold wheat which is actually what he was doing. there was a huge difference between the conditioning regulations come conditioning access to health care market saying you must buy a product and forcing you to buy a product. >> that was common ground that the requirement in what was the community-based and despite the health status they can't refuse because of a pre-existing condition. the government tells us, and the congress determined, that those

won't work unless you have the approval but will include that you're healthy. so first, do you agree with your colleague that the community-based? >> the guaranteed issue. >> yes, that that is legitimate legislation? >> sure. but we don't have any way to impede that sort of regulation. it's nondiscrimination regulations will apply to every insurance whether or not we buy insurance. stat venison that the determination that they can't possibly work if people don't have to buy insurance until their health status is such that an insurance company just dealt with them at will because you're

already sick. >> it will work just fine. sec'y will say in surely if it can be insurance late? >> the government is a very logical argument. they seem to say we couldn't force people to buy insurance to the lower premium that would be no good. we can do it because we have created the problem. we have driven up the health insurance premium and since we have created the problem is somehow gives us the authority that we wouldn't otherwise have. >> but you say that there is what percentage of the american people? who took their son or daughter to an emergency room and that child was turned away because the parent didn't have insurance? do you think there's a large percentage of the american population for which stands for the death of that child they had

an allergic reaction and a simple shot would have saved the child? >> one of the most misleading is that we're somehow affixing people to get thrown out of emergency rooms or this whole turn of the deal they hypothesized is going to be enforced by throwing people out of emergency rooms the body of of insurance is precisely the same way that the act does. you either buy health insurance or pay a penalty. $695. you don't have doctors throwing people out on the street. >> so the penalty is okay but not the mandate? i'm sorry. media i misheard you. >> they create this strongly. the only alternative the way that we have done that if we condition access to health care and buying health insurance the only way you can enforce that is making sick people not get care. i am saying no, no. there is a perfectly legitimate way they could enforce their

alternative requiring that to you by hoeven tonnes when you access to health care which is the same penalty structure that is in the act. there is no moral dilemma between having people have insurance and denying them emergency service. converse has made a perfectly legitimate value judgment that they want to make sure people get emergency care. since the founding whenever the congress has imposed the public responsibility on private actors it is subsidized from the treasury. it is not conscripted a subset of the citizenry and the then subsidize the actors that are being heard which is what you're doing here. they are making young healthy people subsidize insurance premiums for nondiscrimination provisions have put all insurance so the insurance companies and that is the fundamental problem. >> i want to understand the choices that you are saying that

congress has. congress can tax everybody and set up a public health care system. that would be okay. >> they've taken the same position as your colleague. congress can't say we are going to set up a public health care system. but you can get a tax credit if you have private health insurance because you won't access the public system. are you taking the same decision? >> i fully agree with my brother that the tax would be unconstitutional. i don't think he means to suggest why but a tax credits that incentivizes you to buy insurance creates problems. congress incentivizes all kinds of activities. if the date a tax credit to buy insurance that would be our choice whether that makes

economic sense. >> if it says the tax payer fails to meet the requirement of having minimum coverage than they are responsible for paying the shared responsibility. it's the difference between banning cigarettes and say i'm going to lead to a 5-dollar a pack penalty. if you want to buy cigarettes caught fire. i'm going to charge you tax of $5 a pack. >> i think that is what is happening isn't it? >> i thought that a ready was paying what is it, $7 a pack? i don't even know the price but it's pretty high. >> it's all taxation for the purpose of persuading you to buy it. >> that is precisely my point. everyone including it is dramatically different than saying cigarettes tomorrow or a is illegal. ..

but simply whether those decisions of that group of 40 million people substantially affect interstate commerce that has been set up in part for those other programs. that is the part of your argument i'm not hearing. i mean, please come it is clear that the failure to buy health insurance doesn't affect anyone.

default on your payments to your health care provider does. congress chose, for whatever reason, not to write a conflict of the focus on your health care provider. to use a 20% or whoever among the uninsured as a leverage to regulate the 100%. >> i agree that is what is happening. and the government knows that's because insurance is unique in the next case the next market is unique. but i think it is true that most questions agree that in the insurance and health care world, both market could blame to market. the young person who is uninsured, is uniquely approximately very close to affect in the rate of insurance and the cost of providing medical care in a way that is not true in the other interest. thanks mike for. and i may be misunderstanding,

justice kennedy, i hope i'm not. sure, it would be perfectly fine if they allowed -- you do have a risk for young people on the basis of a real risk for disease, just like insurance on the home on a risk of flight. one of the issues here is not only compelling us to enter the marketplace. they're prohibiting us from buying the only economically sensible product we would want, catastrophic insurance. everyone agrees the only potential problem for a 30-year-old as he goes from a healthy 70% of the population to the unhealthy 5% and get congress to prohibit anyone over 30 from buying catastrophic health insurance. and the reason they do that is because they need this massive subsidy. the cbs said that in general my client in the risk polls lowest premiums by 15% to 20%.

so justice kennedy, even if we create inside iraq said of congress to make a closer nexus and say we really address this problem. we want for 30 euros to get catastrophic health insurance. not only did they deprive that option. and i think that illustrates dangers of getting congress powers because they can always leverage them. they cannot come up with some public poesy rationale that converts the power to regulate commerce into the power to promote congress, which is everything before is one that i think is planned. >> mr. carvin, a concerned question of whether certain kinds of people are active participants in the market or not active participants in the market. your task, the test that focuses on the fact tbd distinction that force one to confront that problem all the time. now, if you look over the history of the commerce clause, what you see is they were sorted

unhappy series from the court use test like this, direct versus indirect, commerce versus manufacturing come it seems most people is they those interested in really worth. the question is why should this pass, inactive versus act to your penny better quite >> the congress identifies the problem if you create the principles. you have to draw distinguish between the car industry and all that. the commerce cross, jurisprudence at the double corporate for the 1930s and they draw other kinds of distinctions among industries froissart taxes, but the very sensibly argued by the product was congress telling you to buy the product? i can't think and if congress has the power to chile to buy this product, obviously the power compels you to buy any product because any purchase is going to benefit congress and this is never going to second-guess congress' policy

judgments on how important is this product versus that product. >> keeping china line between congress and everything else that is not congress is drawn an artificial line between commerce and manufacturing quiet >> are worth commerce and non-commerce power. and again, the distinction comes from the constitution. the framers conscience leads give congress the ability to regulate because that's not a particularly threatening a dvd of individual freedom. if you are authorized to require and transfer property, you have a monster in legislation which is injustice because everyone understands that regulating people who voluntarily enter under terms and conditions does not create congress and wealth transfers among the citizenry and that is precisely what the framers decide on the power to compel congress.

>> thank you on the mr. carvin. general verrilli, you are foreign minister mate. >> thank you, mr. chief justice. congress confronted a great problem when it enacted the affordable care act. 40 million americans can't get health insurance and suffered often very terrible consequences. and we agree, i think everyone arguing this case agrees that congress could remedy that problem by imposing the insurance requirement at the point-of-sale. that won't work. reasonable work is because people will still show up at the hospital or at the admissions office seeking care without insurance pardoning the cost shifting problem in mr. clement suggested they could be signed up for a high risk with that point is utterly unrealistic. think about how much it would cost to get the insurance when you are at the hospital or at the doctor. they would need understandingly high. that would never work. congress understood that.

it shows the real work in the states, and the state of massachusetts and had every reason to think the work on a national basis. that is the kind of choices means that macola santos that the constitution lays the democratically accountable branches of government. there is a temporal limitation the commerce clause. everyone subject to speculation in or orwell began the health care market. they're just being regulated in advance. that's exactly the kind of thing that has to be left to the judgment of congress and the democratically accountable branches of government. i think this is actually a paradigm example of the situation that chief justice marshall envisioned an macola itself, that the provisions of the constitution needed to be interpreted in a matter that will allow them to be a fact that in addressing the great crises of human affairs that

framers could not envision. if there's any doubt about that under the commerce clause, then i urge this court to uphold the minimum courage provision as an exercise of the tax empowerment. under or against the united states, this is a precisely parallel situation. the court thinks any doubt about the ability of congress to impose a requirement in 5000 pages a day that can be treated as something the credit goes to which the tax incentive for 5000a or b. seeks accomplishment. and the court come as the court said in new york as a solemn obligation to respect the judgments democratically accountable branches of government and because the statute can be construed as a matter that allows it to be upheld and that way i respectfully submit if this accordance that we do so. thank you peered >> thank you in the general. counsel, we will see you

tomorrow. >> are look at the u.s. supreme court oral arguments on the constitutionality of the 2010 health care luck continues. the court is expected to rule on the corporate for justice flees before the summer break. next on severability, question what happened at the core police and the individual is unconstitutional. that is followed by the expansion of medicaid and other states to be forced to extend their program service caught the funding. our newsmakers to speak our congressman tom price, the house republican policy chairman. he talks about the house republican responses to an expected decision from the supreme court on the affordable health care act and the president's announcement today on immigration. congressman price is a surgeon and member of the doctors congress in in the house. join sunday at 10:00 eastern six eastern descent.

a look at attorneys arguing before the supreme court. michael carvin is looking at the national federation of independent business. former deputy assistant general the justice department office of legal counsel. mr. carvin is a graduate of tulane university and earned his law degree from george washington university. deputy u.s. solicitor general edwin needler join the solicitor general's office in 1979. he completed a clerkship for judge james browning of the ninth circuit court of appeals. he earned his undergraduate degree from lehigh university and his law degree from the university of virginia. >> joining again, richard wall from "usa today" talking about the supreme court's upcoming decision on the health care case can the so-called individual mandate is at the heart of the third oral argument. what is at stake? >> well, this part of the argument basically says it mandated start down, what else must be struck down or could still stand at the question here

is on severability? of the four different arguments the justices will hear, this one is the one that is sort of causing the most split among the justices. in other words, a lot of the justices are really unclear on which way to go here. i'm the one hand, you had the plaintiff saying that, well, the individual mandate was the heart of the law. if you strike that down time you should strike down the whole lot. you can't go picking and choosing. the only clean way to do it is to strike down the whole lot. on the other hand, the government says well, no come most of the law has nothing to do with the individual mandate. that's expanded coverage, texas, different changes of the insurance market. those should all go forward with a huge loss of 27 pages and only 10 pages had to do with the mandate. but the government does say that a couple of the very popular changes in the insurance market, those that say insurers can't

discriminate against you for having a preexisting condition, and also those that make insurance more affordable, even if you are relatively expensive risk, say someone added. van stage, that those provisions should be knocked out of the mandate is not doubt. the government says even though the government one of those provisions. the reason they say that is they basically made a deal with the insurers that the insurance can't deal with all of those expensive improvements to be judged as to be an insurance about the mandate to break software people into the market with their premiums. the government has made the argument that without the mandate you should suffer some of the insurance changes. the plaintiffs, which are the states and business community have made the argument that without the mandate the whole law should go. and because no one made this argument, the justices are bringing in another lawyer to say, well now, you can start to mandate cannot say. it's not for you to decide anything further.

a lot can go further without the mandate. a lot of people say that would create an untenable situation, but one which congress could then try to go back in an address. the untenable situation being premiums of raspberry one else because you don't have additional people entering into the insurance market. you have much fewer people covered as a result than the one intended. the federal cost -- it would probably go down in this instance, but there are other problems that would be created as a result of not having the insurance mandate, but having all of these changes in the health insurance market. >> moorehead with richard wolf of "usa today." read more at "usa today".com. >> now, oral argument on severability of the individual mandate from the health care luck. justices examining what would happen if they rule the mandate is unconstitutional.

assistant solicitor general meeting lawyer is joined in this 90 minute argument by attorneys call matt and barto fire. >> we will continue to argument this morning to case number 11393, national federation of independent business versus sebelius and case 11400, florida versus hhs. mr. clement. >> mr. chief justice, may please the court? the rest of the act cannot stand. as congress found in the federal government can see, the community rating a guaranteed issue provisions of the act cannot stand without the individual mandate. congress found that the individual mandate was essential to the operation. and not only can guaranteed issue in the community rating not stand and operate in a

manner that congress intended, it would actually counteract congress is basic goal of providing patient protection, but also affordable care. if you do not have the individual mandate that foreseeable into the market, community rating a guaranteed issue will cause the cost of premiums to skyrocket. we can debate the order of magnitude of that, but we can't debate the direction of the upward. we also can't debate -- >> that may well be true. economists go back and forth on that issue. the figures there from 10% to about 30. we are not in the habit of doing the legislative findings. what we do know is that for those states that found prices increasing, that they found various solutions to that. in one instance, we might not say that it's unconstitutional,

massachusetts passed a mandatory coverage provision. but other suggested some of the other provisions. why should we in congress do that if in fact the economist, some of the economists prove right date prices to spiral? what's wrong with leaving it in the hands of the people who should be exceeding us, not as quick >> a couple responses, just a soda first of all, it's very relevant here that congress has before as example some of the states that try to impose guaranteed issue in community ratings and did not oppose an individual mandate and congress rejected that model. so your question is quite right in saying it's not impossible to a guaranteed issue and community rating without individual mandate. but at the model congress looked at specifically reject it. of course there is congress is on finding, which is 43 of the government's brief in the

appendix. congress specifically found having the individual mandate is essential to the operation of guaranteed issue in reading. >> but so is essential -- i am looking that the exchanges, the state exchanges or information gathering facilities that tell insurers what the various policies actually mean. and that is proven to be a cost labor and many of the states who have tried it. so why should we be striking down a cost saver? if what you're argument is -- was that congress is concerned about costs rising? >> i think soon they wouldn't pass that information. >> i think a couple of things. if we're going to look at congress' goal of providing protection, but also affordable care, i don't think it works to just take the things that save money and cut out the things that are going to make remains

more expensive. >> the bottom line is bundled with a congress do this? been acclimated to the bottom-line question which is no matter what you do in this case, at some point you straight in the mandate, and it's going to be something for congress to do. the question is really what do you want to give congress? do you want to give congress the task of fixing the statute after something has been taken out, especially a vision of the heart? or do you want to give congress the task of fixing health care? >> if we strike down one provision, we are not taken up our way from congress. congress could look at it without the mandatory coverage provision and say, this model doesn't work. let's start from the beginning. we have to fix what it has. we are not declaring one portion and doesn't force congress into any task. >> of course that is right, justice sotomayor. the matter what should you congress love options available.

if you straight to only individual mandates, congress was at the next day, that the last thing we ever wanted to come us will strike down the rest of the statute immediately and then fix the problem. whatever you do, congress love options. >> there's such a thing as legislative inertia, isn't there? >> i think the question is we all recognize as legislative inertia. the question is what is the best result in light of that reality? >> we should take on more power to the core. congress would choose to take one path rather than another. that is sort of taking onto the court more power than one would want. >> i agree. we are asking the court to take straight on the idea of the basic remedial inquiry and severability looks to the intent of the congress. >> why do you like -- you sure below to the intent of the congress? i thought that sometimes

congress says these provisions provisions -- all provisions of the act would be severable. can we ignore that when the act really won't work? and the remaining provisions just won't work? do how can you square that reality with the proposition that what we're looking for here is what would this congress have wanted? >> two responses, justice scalia. if we look at severability they'll find that the test differently. one of them talks about congressional intent. but here is the other -- >> that's true, but is it right? >> here's how i answer your question. when congress includes severability class company addresses the abstract. it doesn't seem to matter which provisions he strike down we absolutely positively want what is left. >> the consequence of your proposition kumble congress have enacted without this provision, okada the consequence.

that would mean that if we start down nothing in this legislation that, with the code, the cornhusker kicked back, okay, we find that to violate the constitution proscription of venality, okay -- [laughter] when we strike back down, it is clear that congress would not have passed it without that. it would've been means of getting the last necessary vote in the senate. and you are telling us that the whole statute would fall because the cornhusker kicks back kippy wright. >> justice scalia, i think the basic proposition that it's congressional intent. when the court is a silly different way of defining legislative intent. i would suggest on common ground among every member of the court is if you service attacks,

everyone can agree. >> you suggest and i think this is right, but there is a textual basis for saying that guaranteed issue and community provisions are tied to the mandate. he pointed to where that was in the finding. is there a textual basis for anything else? i've been unable to find one. it seems to me if you look at the attacks, the sharp dividing line is between guaranteed issue community ratings on the one hand, everything else on the other. >> justice kagan, delighted to take you through my view of the text of why there's other things that have been called. the first place i have to look is finding jay. that is the individual mandate is essential to the operation of changes. there's other ratings and there is the way the exchanges are supposed to work and it makes this clear where people can

compare function. >> the function perfectly were in utah where there is no mandate. they function differently, but the function. it is always the congress runs half below, but on something like the exchanges, it seems to me a perfect example for half below is better than no loaf. they won't do everything congress envisioned. >> justice kagan, their situations where it's actually worse than i want to address that. before he do that if they can stick with just the exchanges, the questions court is supposed to ask is not just whether they can live and operate independently, but whether they operate in the manner congress intended. but i think the exchanges really fall down. the vision of the exchanges as if you got out of the current situation or health insurance basically individualists prices

based on individual underwriting and provide community ratings, it will be very easy for people to say okay, this is a sober policy and this is a prompt policy and ethical policy. i can pick which insurer provides i think is going to be the best service "the sun" is comparable provisions. >> you just said something is a lot in your brief. the question is the manner in which it operated. i think that is not in our case. the best example would be poker, where he decided not sever provisions, notwithstanding the sentencing guidelines clearly operate in a different manner now than they did when congress passed them. they operated advisory rather than mandatory. >> justice kagan, our point as well. there's two aspects of the remedial holding of poker. the first part was very much supports their point is for the majority rejects the approach of

the defense, which would've required nothing in the statute to have been to construct a single word. but nonetheless come a discourse that if you do that, but all sentencing is basically going to be done by a combination of the cherries and the prosecutors and the judges will be cut out in the course of the one thing we notice that's not the manner in which congress thought they should operate. later they make a different judgment about which particular provisions to cut out. but it certainly consistent with what we rely on because they're the court only reached that part of the opinion after they aired he found a higher provision operated functionally independent from legislative. >> mr. clement, there's so many things in the act that are questionably okay better reauthorizing what is the indian health care improvement that, the black lung benefits.

by that congress retrieve those? it is a question of whether we start from scratch. there are many things that have nothing to do frankly with it, the affordable health care. and there are some that we should leave for congress to decide whether they want that in rl. why should we say that the choice between a wrecking operation, which is what we question, or a salvage job. any approach would be saw this at everything. >> justice ginsburg, two kinds of responses. i think there are some provisions i would identify it be at the periphery of the statue. i think a case for severin knows is perhaps the strongest. but i do think it's fundamentally different because the weary and you're arguing that some provision on the

periphery of the statue, but by a similar site, or some of the provisions you provisions he mentioned was unconstitutional, he would strike it down and not even think about severability. what makes this different is the provisions of constitutional difficulties were tied if they had to does provisions that the constitutional difficulty at the very part of this fact. then if you look at how they are textually interconnected with the exchanges, which are then connected to the tax credits, which are also connected to employer mandate, which is also connected to the revenue office and medicaid. if you follow that through, what you end up with at the end of the process is just sort of a hollow shell. at that point i think there is a strong argument for those who can't possibly think congress would've -- that hollow shells. >> it would have passed. a lot of this is reauthorization of appropriations that are currently authorized in the previous five or 10 years it was more convenient for congress to throw it in the middle of the

2700 pages into two separately. i mean, beside the black lung benefits act and thus have nothing to do with any do with any of the things we are talking about. >> mr. chief justice, they try to make them germane. i'm not here to tell you that surely there are provisions just looking for the next legislative vehicle across the finish line and someone will attack it to anything that's moving. the question isn't everything else from the center of the act is interconnected and has to go. if you follow me that park on the question is would you keep the followed up shall? >> honesty whether the test, and this colloquy you have justice scalia. i need to know what standard you are asking me to apply. is it whether it is a rational manner separate parts could still function, or does it focus on the intent of the congress? suppose you have party a wants to have proposal number one.

party b. wants proposal number two completely unrelated. one is airline rates, the other is milk regulation. i may decide them together. the procedural rules have to be voted on and they both pass. then one is declared unconstitutional. now we know the congress would not have intended to pass one without the other. it's at the end of it? or is there some different test because we don't neglect to legislative his very come so we ask whether or not an object it is an objective rational manner, went to function. i still don't know what the test is that we're supposed to find. this is same question -- can you give me some help? >> sure, justice kennedy, the reality is the courts opinion has bowstring for the analysis. >> what test you suggest we follow if we want to clarify our jurisprudence? >> i'm a big believer in

objective test. be happy to play a more objective approach produce more justices that are more inclined and if you look at the legislative history that, it would only fortify the conclusion you would reach from the very objective textual inquiry. i'm happy to focus the court on the objective textual inquiry. >> that suggestion is what? >> whether they can operate in the matter congress intended. >> no statute can do that. once we chop off a piece of it by definition it's not the statute congress passed. so it has to be something more than that. >> justice sotomayor, if you formulation for severability and interpret it, it becomes part illogical. and in footnote of the brock opinion we rely on, where he said of course it doesn't operate exactly the manner because it does not fall to

pieces. but you still make an inquiry as to whether congress reacts to provisions together. >> so what is wrong with the presumption that our law says, which is we presume that congress wouldn't want to settle? would not be the simplest, most objective test going past to justice scalia says we have done? okay, get rid of intent altogether commode some of our colleagues in other contexts are promoted and just say unless congress tells us directly is not separable, we should let them fix their problems. you still have announced -- you answered me why in a new structures like ours, were each branch does different things, why we should involve the court and making the legislative judgment. >> justice sotomayor, what answer the specific question and then look at the big picture. you could do that. you could adopt a new rule now.

>> what is the presumption in some cases? recall that judicial action. >> in fairness, justice sotomayor to get to the point you want to get to come you to ratchet up the presumption a couple takes on the scale. >> what is wrong with that? >> one thing wrong with that which is still a smaller level that's inconsistent with every state and every severability opinion, which i'll talk about the impressionable attend. >> you have to go back decades and decades and decades. and i'm not sure even then you can find a piece of legislation we refuse to suffer for this reason. >> i don't think that's right, justice kagan. there's more recent examples. maybe it's a segue to my broader point is the case that involves the federal statute, but i don't think anything turns up not as randle against furrow, with as

struct on the campaign finance law, by the contribution provisions that were not touched by the theory that were used to search on the contribution limits, but it's at the end of the opinion said there's no way to think that what the legislature with a handful of provisions there on the constitution side was straight down the whole thing. and if i can take a broader point, the reason it makes sense in a democracy with separation of powers to in some cases over the whole thing is because sometimes a half a loaf is worse. in a greater example if i dare say so with buckley. enacted a statute to try to make coherent way strike down limits on contributions and closely related expenditures. this court struck down the band on expenditures, let the contribution in place and for four decades, congress try to fix what is left of the statute. largely unsuccessfully, whereas much better from a democratic separation of powers standpoint

if the court would've sadler, expenditures can't limit expenditures under the constitution, the contribution provision joined at the hip. if congress a chance to fix the problem. >> finance one practical question. i take as a given their answer to say let's look at it objectively and say congress' intent to this. this is a mandate to the communities titled one and two. the mandate with the preexisting conditions, okay? the rest of that, when i looked at the rest of it i have all kinds of stuff in there. i haven't read every word of it. as he pointed out, their similarities, there's breast-feeding, promoting nurses and heirs in class act, et cetera. would you suggest we do quite should we appoint a special master with an instruction quake should be go back to the

district court? you haven't argued most of these. as i hear you now come you're pretty close. he would like it i'll start down, but you're supposed to play the object to test. i don't know if you differ very much. so what do you propose we do other than spend a year reading all of this and have you argue? >> what i put proposes the following. to follow the argument thus far and then ask yourself whether what you have left is a hollowed out shell. >> i would say the breast-feeding act, getting doctors to serve underserved areas, device similar name in drug regulation, the class act have nothing to do with the stuff we've been talking about yesterday in the day before, okay? did nothing to do with it. they can stand on their own. the indian thing about helping the underserved native americans , all that stuff has nothing to do. black one deceased, nothing.

so you know should have their? accountable for poor impression. so that is why i'm asking you, what should i do quite >> what you should do is limited to following, which is follow me this far. mandatory individual mandate is tied on community rating, but the individual mandate and guaranteed reading together are the heart of this act. they are what make the exchanges work. the exchanges in turn are critical to the tax credits because the amount of the tax credit is key to the policy price on the exchange. also key to the employer mandate that comes on the employer if they get insurance on the exchanges. but it doesn't stop there. look at the medicare provisions for dish hospital. these are hospitals that serve a disproportionate share of the needy. from the other party that the other hand, but it does the work without and the community rating an issue. >> but which are fallback

position be if we don't accept the proposition that the mandate is declared unconstitutional and every single provision has to follow? other dispositions have been proposed. there is the solicitor general disposition, recommended disposition on community rating provisions. strike down all title i. another says strike down all title i and title ii. but would you suggest? >> well, i think what i would suggest i don't want to be unresponsive is that she sorted all of the argument through and figure out what in the cooler of the ax falls. my fallback would be if what is left is a hollow out shell. if you want a practical answer, i think you could use justice breyer of the starting point and basically say title i and a handful of related provisions closely related to that are really the heart of the act.

i mean, you could strike one and leave the other, but at a certain point -- at a certain point, i just think the better answer might be to say we struck the heart of this fact. bush is give congress clean slate if it's so easy to have the other big volume every enacted and they can do at a couple days and i won't be a big deal. [laughter] >> you come off if you want, but i rather suspect he won't be easy. if you actually dug into that there'd be something quite controversial in their they couldn't be passed. >> the reality of the passage. this is a piece of legislation, which had to be a concerted effort to gather enough votes that could be passed. i suspect that a lot of the miscellaneous provisions that justice breyer was talking about was the popular vote. the indian health care provision

that will go for the other 2700 pages. but in the black lung provision and not go along with it. that is what all of these provisions are put in. not because they're objectionable. so presumably what congress would've done that would have been able to put together the votes to get it through. >> vb that's right, mr. chief justice. i don't want to spend all my time fighting over the periphery because i do think there's some provisions they would you remake as an exercise of their judgment that must of got rid of the core provisions of this act he would then decide to let the periphery fall with it. if you want to keep the periphery, that's fine. but it's important to as the core provision of the act, which are just the mandate community rating, but includes medicare and medicaid. i think you do want to strike it all down to avoid a readout of buckley i reserve the remainder of my time. >> thank you, mr. clement.

>> thank you, mr. chief justice. may it please the court? there should be no occasion to consider issues of severability because as we argue, the minimum coverage provision fully consistent with article i of the constitution. but if the court were to conclude otherwise, it should reject progression or sweeping proposition the entire act must fall if one provision is held unconstitutional. as an initial matter, we believe the court should not even consider that question. the vast majority of the provisions of this act do not even apply to petitioners, but instead millions of citizens and businesses who are not before the court. how does your proposal actually were? your ideas when they take care of it themselves, do contemplate them bringing litigation? insane i guess the insurers are the most obvious ones without the mandate, the whole thing

falls apart that we will bear peter krause. so the rest of the law should be struck down. that's all another line of litigation. >> i think the continuing validity of any provision would arise in litigation that would otherwise arise under that provision. >> what cause of action is that? had never heard of the severability cause of action. >> in the first place comes a point isn't there has to be an affirmative cause of action to decide this. for example, the medicare reimbursement issues, one of the things this does is change medicare reimbursement rate. the place where someone adjudicates the validity of medicare reimbursement rates through the special statutory review procedure for that. and the same thing is true with the injunction that. >> there is some provisions, which no one would have standing to challenge if the provision is an expenditure et cetera many,

it doesn't hurt anybody except the taxpayer, what the taxpayer doesn't have standing. that just continues, even though it is so closely aligned to what has been struck down that it to go as well, but nonetheless it has to continue because there's nobody in the world that can challenge it. can that possibly be the law quite >> i think that proves her point, justice scalia. just because everyone asked in a challenge and particularly tax credits for taxes challenged only after going through the anti-injunction that, just because no one is standing doesn't mean someone nice. >> those are provisions that have been legitimately enacted. the whole issue here is whether these related provisions have been legitimately enact that or whether they are so closely aligned to one that has been

held to be unconstitutional, but they also have not been legitimately enact it. you can't compare the two cases dealing with a statute that nobody denies is constitutional. >> this case is parallel to the prince case in our view. and in that case, the court struck down several provisions and went on to say it had no business addressing severability of other provisions that did not apply to the people before. >> what he is thinking of this, i think justice scalia is thinking i suspect that the margins that this tax unknot why to purpose acts, which will pay for half. the other half will come from the exchanges somehow. the second half is unconstitutional. purpose acts can't possibly be carried out now with only half the money. does the government will set

there forever because no one can ever challenge it. if you were inextricably connected, is it enough to say, well, we'll consider that because maybe someone else could bring up case and there is no one else? >> would think that is the proper way to proceed. >> there's a choice between someone else bringing the case and the law stand in place. what we're really talking about as just a sotomayor started this discussion is who is the proper party to take out what is then invested by the court holding? with all these provisions that may be standing, one of the two shannon does have a say. and that's congress. what the provisions to spend

congress can take care of it. it's a question that decide should the court said are going to wreck the whole thing? or should we leave it to congress? >> we think the court should leave it to congress for two reasons. one is the point i make now about whether the court can properly consider it at all. the second is we think only few provisions on the minimum coverage provisions. >> before you go, mr. nagler, i would like your answer to justice breyer's question. >> we believe that in the days that tax provision should not be struck down in the first place the anti-injunction act would bar a direct suit to be very strange to love the tax to be struck down on the basis of the severability analysis. ever ability allows only where it's necessary to consider what

really is a party before the covert shakeout. >> there was a non-severability provision in this period of one provision were to be held unconstitutional, then every single -- someone would have to bring a separate lawsuit challenging every single provision that and say, well, congress said it's a package that can be separated and that's the position. >> fact that if such a clause might make it easy doesn't change the point. article iii jurisdiction provide each question as well as hard questions. >> there is no article iii jurisdiction. this is a remedial exercise to explain the consequences of the judgment in this case. >> this court had said one has to have standing for every degree of relief that is thought, that was los angeles versus lions.

>> don't you think it's unrealistic to say the bit to congress as though you're sending it back to congress for congress to consider it dispassionately? on balance should we have this provision or should we not? that's not what it's going to be. it's going to be these provisions are in effect, even though a lot of you never wanted them to be in effect and you only voted for them because he wanted to get the heart of the act, which has now been cut out. but nonetheless, these provisions are the law and you have to get the votes to overturn them. that is an enormously different question from whether you get the votes initially to put them into the law. there is no way that this course decision is not going to distort the congressional process. whether we strike it all down or leave some of it in place, the

congressional process will never be the same one way or another, congress is going to have to reconsider this. why isn't it better to have them reconsider it? what should i say, in toto, rather than having something already in the law, which you have two eliminate before you can move onto the better everything on balance. >> we think is a matter of judicial restraint, limits on equitable remedial power to limit the court to addressing provision has been challenged as centcom to shawl and anything else that the plaintiff seeks as relief. >> when you say judicial restraint, you are echoing the earlier premise that it increases the judicial power if the judiciary strikes and other provisions of the act. i suggest you may be quite the

opposite. we be exercising judicial power when one provision in the stricken and the others remained to impose a risk on insurance companies the congress had never intended a reason of this court, we would have a new machine that the congress did not provide for, did not consider. that seems to me can be argued at least to be a more extreme exercise the judicial power than to strike when striking the whole. don't accept the premise. >> i think not, justice kennedy. on the font. this exactly the situation. the court identified the questions that were briefed before the court as important ones, but said they affect people with rights and obligations of people who are not below the force. >> move away from the issue of whether the standing question or not. make the assumption that this is

an issue of the court exercise that discretion. because the last two questions had to do with what is wise for the court to do. not whether it is power. so let's move beyond the power issue, which is airing there is centered on. give me sort of policy. i know that a word sometimes, but what should guide the court discretion? >> well, we think that matters to blend into -- blend into discretion and in turn blend into the merits of the severability question. ms did that, just to answer a question that several justices have asked, we think the severability is a matter of statutory interpretation that should be resolved by looking at the structure of the act and the

court may look at what the text and structure mean with respect to severability. >> what happened to the eighth amendment? you want to go through the 2700 pages? and he really expect the court to do that? would you expect us to give this function to our law clerks? is this not totally unrealistic they are going to go through this enormous bill? and decide each one? >> well, that is correct. i just want to finish the thought i had about this being another statutory interpretation. the court submit not to look at the legislative process to see whether it would've passed or not based on the political situation at the time, which would basically convert the court into a function such as a

whip count. >> that would be revolutionary severability. i mean, we've never suggested there were going to say look, this legislation as a broker compromise and we're going to try to figure out exactly what would've happened in the complex parliamentary shenanigans that go on across the street to figure out whether they would have made a difference. instead, we look at the text that's given us for some people would look over the attacks. should be easy for justice scalia's clerks. [laughter] >> i don't care whether it's easy for my clerks. i care whether it's easy for me. >> i think that's exactly right. i said it has statutory interpretation. >> it's a question of statutory interpretation. that means you to go through every line of the statue. i have heard your answer to

justice scalia's questionnaire. >> in this case there's an easy answer and that is justice kagan pointed out that the act itself creates a sharp dividing line between the minimum coverage provision of package of reforms, minimum coverage along with guaranteed issue a community ratings. that is one package economist deemed essential. >> how do you know that? >> where is the sharp line? >> it is in congress is finding that the minimum coverage provision that congress hadn't find you i without that provision people would wait to get insurance and cause all the adverse selection. >> that makes your case the one provision should fall. it doesn't tell us anything about the other provisions. >> well, i think it does because congress said it was essential

to those provisions, but conspicuously did not say that it was essential to other provisions. >> me ask you about the argument made in the economist amicus brief. they say the insurance reforms approved 10 year cost is $700 billion on the insurance industry and these are supposed to be offset by about 350 billion in new revenue from individual mandate and 300 billion from the medicaid expansion. another 350 billion bpo disagree with the numbers that are fundamentally wrong. but assuming they're in the ballpark, at 350 million an individual mandate were to be lost, what would happen to the insurance industry, which would now be in the hole for $350 billion over 10 years? >> first of all, for the court to go beyond to try and figure out how the finance of the bill operated conflicting budget

committee, but we think the economist that added up the figures wrong. there's medicare expansion, insurance companies involved in that will be reimbursed. >> we talked about the individual mandate. as the government have a position of the should have been at the medicaid expansion is struck down? >> we don't think i would have any perfect on the rest of it. >> the government's position is that medicaid expansion is struck down, the rest of the act and operate. >> yes. in the past, congress has expanded medicaid coverage without many times without there being minimum coverage provision. >> i don't understand without the question. assume that there is a substantial probability that the 350 billion posted in 50 billion

equals seven is going to be cut in half if the individual mandate is strict in. assume there is a significant possibility of that. is it within the proper exercise to oppose that kind of risk? can we say the economists would have intended there be that kind of risk? >> we don't think it's in the course plays to look at the budget implications. >> but isn't that the point then why we should just assume that it is not severable? if we lack the competence to even assess whether there is a risk, then isn't this an awesome exercise of judicial power? >> we are doing something and not telling at the consequences might be. >> i don't excel because me talk about monetary consequences, you look through the act, behind and. the courts function is to look

at subsidy provisions of the act itself being. >> can you give us a prior case that resembles this one in which we were asked to strike down what the other side says is the heart of the act? and yet leave and come as you request, leaving affect the rest of their? most of our severability cases, you know, above one little aspect of the act and the question is whether the rest, when have we ever really struck down what was the main purpose of the act amongst the rest in? >> in booker, the mandatory sentencing provisions were central to the act, but the course that congress would have preferred a statute without a mandatory provision in the act

and the court struck that, but the rest of defendant in guidelines remained. >> i think the reason the majority said that was set he didn't think there will was essential to be at was what had been straightened out. that was the ability of the judge to say on his own what the punishment would be. ..

or accept an argument on several delayed because it is a lot of work for us. that is beside the point. but do you think that it's possible for you and mr. comment to get together on a list of things which in both of your opinions peripheral then you'd focus on those areas where one

of you thinks it is part of a roll and it's not peripheral and at that point it might turn out to be far fewer than most currently imagining at which point we could hold an argument or figure out some way or somebody try to get those done. >> i just don't think that's realistic. the court would be doing it without the parties. >> a conference committee report afterwards maybe. >> did just is not something the court would ordinarily do. >> of the heart striking down the part do we want half. those are the two analogies. >> i would like to discuss it again in the act. we had a very important indications from the structure of the act the whole thing is not supposed to fall.

the notion congress would have intended the whole act to fall that there couldn't be a minimum coverage provision is refuted by the fact there are many in this act already in effect without in minimum coverage provision. 2.5 million people under 26 have gotten insurance by one of the insurance requirement. $3.2 billion anticipation. that is going to bankrupt the insurance companies if not the state's unless this minimum coverage provision comes into effect. >> there is no reason to think it is going to bankrupt anyone that the cost will be set to cover those amounts. >> the 26-year-olds were saying they were healthy and didn't need insurance. >> 2.5 million people would be thrown off the insurance role of the court were to say that. congress made many changes to the medicare rates that have gone into effect for the courts

to have to unwind millions of the medicare reimbursement rates. medicare has covered 32 million provision of care visits by patience as a result of this act. >> all of that was based on the assumption that the mandate was constitutional. and that certainly doesn't stop us from reaching our unknown. >> but i'm saying is it is a question of legislative intent and we have a very fundamental indication of the intent that the congress didn't mean the whole act to fall without the minimum coverage provision because we have many provisions that are operating now without that. but there's a further indication of where the line should be drawn where i've suggested which is the package of these particular provisions. all the other provisions of the act would continue to advance the congress's cool the test that was articulated but it's been set in other cases.

you look to other the other provisions can continue to advance the process of the act. here they can. the broad public health purpose of the act and related to the minimum coverage provision, but also the other provisions designed to enhance access to affordable care. the employer responsibility provision. the credit for small business, which is already in effect by the way affecting many small businesses. >> many people in congress might not have voted for those provisions. if the central part of the statute was not adopted. you know, to say that we are a threat to waiting the intent of congress is just unrealistic. wants to cut the guts out of it who knows, who knows what we are really desired by congress on their own and which ones weren't. >> the question for the court is congress having passed the law by whatever majority there one defeat to might become congress

having passed the law what at that point is the legislative intent embodied in law. >> that's right, but the problem is straight from the title we have the complementary purposes, the patient protection and affordable care. you can't look at something and say this promotes affordable care, therefore it is consistent with the intent because congress had a balanced intent. you can't look at another profession and say this promotes protection without asking if it is affordable. so it seems to me what is going to promote the condra's purpose that is just temporary the you cannot carry out. >> with respect i disagree because it is evidence congress purpose was to expand access to affordable care. it did it in discreet ways by the penalty on employ years that don't offer suitable care and did it by offering tax credits to small employers. it did it by operating tax credits to the purchasers.

all of those are a variety of ways that continue to further the congress's goal and most of all, medicaid, which is unrelated to the private insurance market together. in adopting those of the provisions governing the employe years and what congress built on its prior experience of using the tax code, which for a long period of time the congress of sliced -- >> you are saying it's something they themselves have not contemplated? i don't understand that. >> employer coverage, 150 million people in this country already get their insurance through their employers. what congress did in seeking to augment that was to add a provision requirement for the employers to purchase insurance. estimate based on the assumption that the cost of those policies would be lower by certain

provisions which are by hypophysis we are not sure why hypophysis are endowed. >> i think that any cost assumptions -- there is no indication that they made in the cost assumptions, but there is no reason to think of the individual market, which is where the minimum coverage provision is directed would affect that. i would like to say -- i point out why the of the things would advance congress's goal. the purpose here is of the three things would be contrary, what contrary to the goal if you took out the minimum coverage provision. and here's why. this is reflected in the findings if you take out a minimum coverage but leave in the guaranteed issuance of the ratings you would make matters worse rates would go up and people there will be fewer people covered in the individual market. >> this is true what is the difference between the guaranteed issue in the

community rating provisions on the one hand and deliver provisions that increased the costs substantially for insurance companies. but simple, the tax on high-cost health plans which the economists amicus briefs said would cost $217 billion over 17 years. >> those are what the congress did not think of those things as balancing insurance companies, insurance companies are participants in the market for medicaid and other things. >> you are saying we have the expertise to make the inquiry he want us to make but not the expertise that justice alito's questions as we must make the islamic that's because i think the court's function is to look at the text and structure and the legislative history that all the congress enacted, not the financial coming off a financial balance sheet which doesn't appear anywhere in the law.

spec you are relying on the converse's quite explicitly tidying these three things. >> we do. >> and it's not just the text of the act the background is experiencing the states. the testimony of the national the association of insurance commissioners. that's the problem the congress was addressing. there was a shifting of the present act real risk in the market but congress wanted to correct and if you took the minimal coverage provision out and left the other provisions, they would be laid on top of the existing shifting of the present actuarial risks, an additional one because the uninsured would know that they would have guaranteed access to insurance whenever they became sick. it would make the adverse selection in that market even worse. so if the congress trying to come up with a market-based solution to control the rates in the market has adopted some of

the would work to control costs by guaranteed issuance of the community rating, but if you take out the minimum coverage, that won't work. the was the congress's assumption that again is shown by the text and legislative history of this provision and that's why we think those things rise or fall in the package because they cut against the congress is trying to do. all of the other provisions would actually increase access to affordable care and would have advantages effects on prices. again, congress was invoking its traditional use of the tax code which is long subsidized insurance through employers has used that to oppose a tax penalty on employers to give tax credits. this is traditional stuff the congress has done and the other thing the congress has done is those pre-existing loss had their own protection for guaranteed issue and community rating with a large employer plans they can't discriminate

among people. they can't charge different rates. what the congress was doing in the other market is all that should be struck from the act. >> thank you. >> chief justice may i please the court. at the outset i would like to say the government's position in the case of the community rating and a guarantee issue provisional to be struck down is an example of the best driving up the good because even without the minimum coverage provision, those provisions from guaranteed issue in the community rating will still open insurance markets to millions of people that were excluded under the prior system and for millions of people with lower prices, which were raised high under the old

system because of their poor health. so even though the system isn't going to work precisely as the congress wanted, it would certainly serve the central goal of the congress had of expanding coverage for people who were unable to get coverage or unable to get affordable prices. >> the point made is that the price would be available because you spoke of the adverse selection problem and the insurance companies are going to have to raise the premiums, so it's nice that the congress made it for more people to be covered. but the reality ithey won't because they won't be able to afford the premium. >> let me say two things about that. first when we talk about the premium becoming less affordable, it's very important to keep in mind different groups

of people because it isn't something that applies accurately to everybody. for people who were not able to get injured and thank you obviously their insurance before hand was infinite. they were not able to get it at any price. they will now be able to get it at a price that they can afford. for people that are unhealthy and were able to get insurance but perhaps not for the things they were the most concerned about or only at very high rates, their rates will be lower under the system even without the minimum coverage provision. also, you have a large number of people who under the act -- >> why do you say i didn't follow that point? >> because why would the rates below are? the rates are going to be lower than they were under the prior system because they are going into a pool of people rather than some of two more healthy than having the rate set

according to their individual health care stricter test. >> the problem is and that they are going to pull people the would gradually get older and on healthier. that is the way it works once you say that the insurance companies have to cover all the sick people and of the old people, the rates climb. more and more people say why should we participate? we can just get it later when we get sick. believe the market, the rates go up further, more people leave the market coming and the whole system crashes and burns and becomes unsustainable to read this is not what i think. what do i know? it is just what is reflected in the congress's findings that it looks at some states and says the system crashed and burned and looked at another state with the minimum coverage provision and said this one seems to work so we will package the minimum coverage provision with the nondiscrimination provisions.

estimate in a moment i would like to talk about finding that if i could just postpone that and talk about adverse selection as of, i think one of the misconceptions here is that the congress having seen the experience of the states in the 90's. is simply imposed the minimum coverage provisions as a possible way of dealing with that and if you don't have the minimum coverage provision essentially adverse selection runs rampant. but that isn't what happened. congress included at least half a dozen other provisions to deal with adverse selection caused by bringing in people that were less healthy into the act. there are, to begin with, the act authorizes annual enrollment period so people can't just show up at the hospital. if they don't show what they can sign up at the right time they at least have to wait for the time next year with the subsidy

there were three different things that make this important. first of all, the subsidies are very generous for people below 200% of the federal poverty line the subsidy will cover 80% on average of the premium which makes it attractive to them to join. the structure of the subsidies because they create a floor based on the income of the person getting insurance and then the government covers everything over that and this is important in adverse selection, because if you have to change in the mix of people and the average premium starts to drop, the government picks up the increase in the premium. the amount a person that is getting ensured contributes remains constant as a percentage of his or her income.

and the third thing -- >> there is nothing about federal support that is unsustainable, right? that is infinite. >> well, that's a fair point, justice scalia. although one of the things that happened if you take the mandate out, while it is true that the subsidies the government provides to any individual will increase and they will be less efficient. i am not disputing that point. actually, the overall amount of the subsidy of the government will provide will decline as the government notes itself in its brief, because there will be fewer people getting it. some people will opt out of the system even though they are getting subsidies. but i would just like to go back for one more second to the point about how the subsidies are a part of the converse was using because the other thing is that for people below to under 50% of the federal poverty line, the congress also picks up and the size is the of pocket cost

raising the actuarial value. so you have all of that and then you have the congress also unlike the states establishing and like almost all the states establishing an age differential of about three frito one cementer vince company for example is selling a 25-year-old of policy for $4,000 in charge of 60 vote $12,000 from exactly the same coverage. when they are instituting these programs, the third half your community rating when everybody is charged the same premium, everybody regardless of their ages charged the same premium. some states had variants of 1.5-1. massachusetts for a simple which did have good subsidies was to throw one when they have the act

it isn't simply looking at the states and thinking that didn't go very well. why didn't we put in a minimum coverage provision that will solve the problem? the congress did a lot of different things to try to combat the adverse selection. i think this is the crux of the government position and then the plaintiff picks up on that and moves to the rest of the act and a seems to me quite honestly an important part because that is textual in this whole sort of quest for what we are trying to figure out seems to stand out as something the court could rely on and say here's something that congress is actually told us. the context in which the congress made it's quite clear if the court wants to look you will find this on page 42, 43 in

the appendix the finding is made specifically in the context of the interstate commerce. that is why the findings are in the act at all. congress wanted to indicate from the court knowing the provision was to be challenged and wanted to indicate the basis on which it believed it had the power under the commerce clause to enact this wall. why does that make a difference with respect to the finding that the government has wanted in particular to the last sentence which says this requirement is essential to creating effective health entrance markets in which guaranteed issue. the reason is because the word is essential in the commerce clause context doesn't have the colloquial meaning. in the commerce clause context, essentially effectively means

useful. when one says in lopez on the court says section 922 is not an essential part of the larger regulatory scheme of economic activity it would be undercut if we didn't have this provision. if that is all the congress needs i agree with that. it won't be undercut if we don't have the minimum coverage provisions. it's like the word necessary in the necessary it doesn't mean that the court has sent a notice occasion absolutely necessary it is advancing the names and it's easy to see i think that that is what the congress >> it's essential and very

imaginative. just give me one dictionary. >> i think my point, justice scalia, is they are not using it in the true dictionary sense. >> when people speak i assume they are speaking english. [laughter] >> i think that there are several reasons why that i would suggest that we know that from. the first as i say the findings themselves the congress says of the very beginning the head of it is that the congress mix the following findings when they are talking about the interstate has headed affect the natural economy and the interstate commerce so we know the context that they are talking about. it is more or less according from the court's commerce clause statement that if one looks at the funding which is funding number eight on 40 to overcome the 43, the congress of the plan also uses the word is essential in the second sentence is says

this requirement, and again, the minimum coverage provision is in a tv crew and an essential part of this larger regulation of economic activity which is by the way and expect quote from lopez in which the requirement would undercut the federal aviation and also an exact quote from lopez what it is referring to. an essential part of the national health service act and the affordable care. it can't possibly be even the plaintiffs had to argue that those acts will all fall in their entirety if you took out the minimum coverage provision. as a second billion example of the same use by converse the statute for the court section 801 of title 21 the court says the regulation of intrastate drug activity, drug

traffic was the essential to the regulation of the intrastate drug activity. again, it is simply not conceivable that the congress would say one is so indispensable to the other the way that the united states uses the term here. so indispensable if we can't regulate the intrastate because we don't want to regulate the traffic either whole wall criminalizing drug traffic would fall. so i think once you look at the finding for what i believe it says which is we believe this is a useful part of our regulatory scheme which the congress would think in its own approach would be sufficient. >> council, the problem i have is that you are ignoring the congressional findings and what the evidence the congress had before it but the community

ratings and given t issuance would be a spiral. i think that is the word that was used without minimum coverage. islamic those are all of the materials are a part of the legislative record. even if it might not be because of the structure of the act, that is postdoc evidence. why should we be looking at as opposed to the congress had before it and use the central and its meaning? you can't have minimum coverage without what the sg is arguing the community ratings and the guaranteed issuing to read you can't have those without minimum coverage. >> riding that is a fair question the idea that all of the information before congress for the idea that he would have a death spiral seems to be contradicted a little bit by the

cbo report in november of 2009 which is about four months before the act passed where thus tdo talks about adverse selection. now i want to be clear this is at a time when the minimum coverage provision was in the statute so i'm not suggesting that this is a discussion with all but in it. but nonetheless, the cbo goes through and talks about the adverse selection and points out the different provisions in the act. the ones i've mentioned, plus one other naturally where in the first three years to the operation has exchanged, those sentiments companies have a sort of less selection of consumers of will be given credit from insurance companies that get better. >> there is an insignificant risks of a substantial lead

first select. that is our economic conclusion and therefore that's where you want me to say? >> doesn't sound right the way you say it. [laughter] >> you don't want them to say that there is a death spiral you don't want us to make those findings. >> that's correct. i agree there is a risk and the significance of it people can debate. but what i think is lost in that question coming and i didn't mean that, it's what is on the other side, which is the fact that if you follow the government said justin come of the court follows the suggestion, what is going to be lost is something that we know is a central part of the act, meaning in the different sort of looks at the legislative history more broadly, i think much of it is corrected towards the idea that the guaranteed issue can

into reading for the crown jewel of the act. the minimum coverage provision wasn't something that everybody was bragging about. it was something there was meant to be a part of this package and i agree with that. but the point was to have guaranteed issue and minimum coverage. guaranteed issue and community rating. that is under the government's proposal those would disappear. we would go back to the old system and under what i think is the proper several of the analysis the question that the court is asking should be asking is what the congress rather go back to the old system than take the risk you are asking about. >> you are referring to the government's second position. first of course is that we shouldn't address this issue at all. >> i asked about what procedure or a process would be anticipated for people that are affected by the change in the

law changing the economic consequences. do you have a view on how that could be played out? it seems to me if we accept your position, they're has to be a broad range of legislation or regulation. any thoughts on how that is going to play out? >> the position that i am advocating i think what would happen in this the court would say the minimum coverage by hypothesis is unconstitutional and the fact of that being on constitutional does not mean the intimidation of any ever provisions under the position that i am advocating, there would no longer be challenges to the remaining part of the act. >> but if the challenge is what we are questioning today, with her if you are an insurance company and you don't believe that you can give the coverage

in the way the congress mandated it without the individual mandate what type of action do you bring the court? >> if the court follows the course that i am advocating, you do not bring an action in the court. you go to the contras and you see a change from congress to say the minimum coverage provision has been struck down by the court. here's the information that we have to show you what the risks are going to be. here are the adjustments we need to make and one of the questions earlier point about states of the justice system's if they have seen things work or not work. i was talking earlier about a different ratio for the ages and insurance and the states tend to change that because they felt having to narrow of the band worked against the effectiveness of their programs but except for massachusetts they didn't enact mandates. succumb to answer -- i think to answer the question of treacly

mr. chief justice, the position that i am not kidding would simply have those go to congress. now, if one, just to discuss the issue more generally of that is helpful, i think that if there were situations where the court deferred let's say for discretionary reasons the courts said we are not going to take up the question of severable the and therefore not resulted in other situations, it seems to me the enforcement actions, for example, the time comes in 2014, and somebody applies to an insurance company for policy and the insurance companies as well, we are not going to issue a policy, we don't think the cure risks are one still we are willing to cover, it seems to me that they could sue the insurance companies and the insurance company could raise its defense that this provision,

the guaranteed issue provision of the statute is not enforceable because it was inseparable from the decision from the provision that the court held unconstitutional. >> let's consider how your approach of severing as little as possible, thereby it increases the difference that we are shoving to the congress. it seems to me that it puts congress in this position. this act is in full effect. there is going to be the deficit that used to be made up by the mandatory coverage provision. all of that money has to come from somewhere. you can't repeal the rest of the act because you're not going to get 60 votes in the senate to repeal the rest. it's not the matter of connecting the rest. you have to have the 60 votes to repeal it. the rest of the act is going to be the law.

so you put to the choice of i guess bankrupting insurance companies and the whole system comes tumbling down or else enacting a federal subsidy program to the insurance companies, which is what the insurance companies would like i'm sure. do you really think that that is somehow showing difference to converse and respecting the space process? it seems to me that it is a gross distortion of it. >> the difficulty is that it seems to me the other possibility is for the court to make choices particularly based on what it expect the difficulties of congress all during the legislation after the court ruling would be. i am not aware of any severable the decision. >> it wouldn't be my approach. my approach would be if you take the heart out of the statute, the statute is gone.

that enables the congress to do what it wants in the usual fashion coming and it doesn't inject us into the process of saying this is good, this is bad. it reduces our options the most and increases congress. >> to some extent i have to quarrel with the premise, justice scalia, because the position i am advocating today under which the court would only to cut the minimum coverage provision i don't think would set the description that you have given of taking out the heart of the statute. i do think once you take out the guaranteed issuing community ratings you are getting closer to the heart of the statute, and one of the difficulties i think with the government said the session is i think it is harder to cabin that bright line around it. it's harder than the government thinks it is.

to begin with, even the government seems to acknowledge the exchange's better going to be relatively pale to the exchanges that are intended to have standards product everybody can come and make comparisons based on product but the other thing that is going to happen is with the subsidy program. the way that the subsidy program is set up, the subsidy is calculated essentially to a benchmark plan. if the court wants to look at the provisions, they begin on page 64 of the private plaintiffs brief again in the appendix. there's the question you are looking to easily calculate the premium by looking at a standardized silver plan. first question obviously is there going to be any such business plan if you don't have

guaranteed issuing community ratings if the plants can basically be individualized to read the second problem is in the provision on 68 for calculating the subsidy what is anticipated in the provision under the act as it is now is you have the floor of the income coming you take this benchmark plan, and the government would pay the difference. and as we talked a better lawyer the benchmark plan can change and the provision says it can be adjusted only for age. so if in fact you even have such a thing as a benchmark plan any more, if the rate of people in poor health go up, because of individual insurance underwriting, the government subsidy is not going to pay for that. >> bayh understand the problem that you gave to justice scalia

was essentially the minimum coverage provision was not the heart of the act instead of as a tool to make the nondiscrimination provisions community rating guaranteed issue work. if you assume all of the minimum coverage as was the tool to make those provisions work, then i guess i would refocus justice scalia's question and say if we know that something is just a tool to make other provisions work, shouldn't that be the case and which those other provisions are severed from along with the tool? >> i don't think so, because there are many other tools to make the same things work. that's the point and of the case that comes to mind is new york versus the united states when the court struck down the provision but left to other incentives essentially in place even without the minimum

coverage provision, there will be a lot of other incentives still to bring people into the market, and to keep them in the market if my reading of the finding is correct and that's ought conagra's is saying is this could be useful it doesn't mean that it's impossible. >> i would like to year before you leave your are dennett if you'd like to against what the justice said. let's assume contrary to what you want, that the government's position is accepted by the majority of the court. and so we are now rid of the heart of the bill. now, still, there are love other provisions here in the act of black lung disease, the wellness program, the restaurants have to have a calorie count of major menu's etc. now, some of them cost money, and some of them don't and there are loads of them. what is your argument that just

because the heart of the bill is gone that has nothing to do with the validity of these other provisions both of those that cost money or those that cost no money. do you want to make an argument in that respect that destroying the heart of the bill doesn't blow up the entire bill. it blows up the heart of the bill. i would like to hear when you have to say about that. >> i think what i would say if one goes back to what i think is the proper set for the the standard and say what the congress rather have not -- have no bill as opposed to the bill with what ever is severed from it it seems to me whenever you are talking about provisions that don't have anything to do if the minimum coverage provision there is no reason to an answer that question as any ever read in yes to respond to the real congress for a hypothetical congress? [laughter]

>> why put congress to that choice. you only have two choices, congress, the bill. >> i think the reason is because the severed a devotee by the necessity of the tool the court doesn't have, even if it had the inclination it doesn't essentially have the authority to retool the statute. >> i would say stay out of politics. that's for congress, not for us. the question here is you have read all these cases were dozens and never found a server the the case where the court after said the heart of the thing is gone and therefore we strike on these other provisions that have nothing to do with it which could stand on their feet independently and can be funded or don't require money at all. >> i think the accurate answer would become and i am not aware of the modern case that says

that. they're probably are cases in the 20s and 40's the would be more like that. >> if i could take one second to address the economist brief that as justice alito raised earlier i want to make one simple point paid leaving aside the whole balancing thing if one looks at the economist brief but it's very important to know that when they are talking about one side they are not just talking about the minimum coverage provision, the very carefully worded it to set the minimum coverage provision and the subsidy programs, and then so when you were doing this the mathematical balancing of the subsidy programs are extremely large in the year 2020. they are expected to be over $100 billion up one year alone. so if you are looking at the numbers, please, consider that. >> thank you. mr. clement, you have four minutes remaining.

>> he says the congress can go into that act to impose minimum coverage. they went into the act to have a different purpose to get people coverage when they needed it to encourage but this is only a tool. other states going back to my original point that there are other tools besides minimum coverage the congress could achieve the same goals, so if the strike just the tool why should we strike the whole act. >> mr. chief justice will make four points of the rebuttal list of justice sotomayor's question. if this isn't just what is the principal told congress identified as an essentials will not just to make it work but it's a tool to pay for it to make it affordable and that

isn't my characterization that is the congress's characterization on page 43 of the government's brief. now, that brings me to the first point of the rebuttal which is he says quite correctly don't look of the budgetary implications. well, the problem with that is once it is common ground that the individual mandate is in the statute at least in part to make the community rating guaranteed issue affordable, that really is all that you have to identify. that establishes the essential link that's there to pay for it. you don't have to figure not exactly how much that is. it really is a substantial part of it because what they're trying to do is take all the individuals and just then into the risk pool and this is quoting their funding which is to get people into the market which will lower the premiums. so that is what their intent was. the final number, you know that is what was going on here and that is the reason alone to sever it. the government also said there is an easy dividing line between what they want to keep and what

they want to dish out. the problem with that is that you read the brief and i think there's a guarantee in the subtitle of the bill. degette out there talking about you have to go to page six of the brief of the openings of ability they tell you what is in and of what is out and the easy dividing line is actually between the 300 to 300 g8 two because of the community rating they say that it goes, but then it has to stay because the community rating for the exchanges. but if you look at the provisions it makes all these references. it just doesn't work. getting back to an inquiry that i did the court actually can approach is to look at the congress was trying to do. you need to look no further than the title of the statute in the affordable care. i agree that the community rating and the guaranteed issue was a crown jewel of this act.

they were what was trying to provide patient protection and what made it affordable, the individual mandate. if you struck down the community ratings and individual mandates there is nothing and that takes me to the last point it created a halfway house that it took 40 years to do with the situation when contrary to their intent when we'll stick with this contribution but we can't get at the expenditures and for 40 years they worked in the halfway house. why make them do that in health care? the choice is to give congress the task of fixing the statute the residual after it struck down or giving them the task of simply fixing the problem on a clean slate i don't think that is a close race. if the individual mandate is unconstitutional for this of the act should follow. >> in support of the decision

below on the several bloody you have even carried out that responsibility for which we are grateful. case number 11393 is submitted. we will continue our demint on case number 11 through 400 this afternoon. >> former clerk for justice william rehnquist completed his undergraduate degree princeton university and earned his law degree from arizona state university.

>> joining us throughout our coverage of the supreme court oral argument, richard wolfe of usa today. medicaid is the heart of the last argument. what is the court being asked? >> accord is being asked uniquely by the challengers the state 26 state governments to knock out the portion of all this is a state that will lock out the entire law. the portion that extends medicaid to about 16 million more people. the reason is that the states or to it is coercive because it is such a good deal in that the federal government would initially pay i think it is 100% of the cost of the expanded coverage which is much more than dhaka program that is normally split in the government. it's not exactly 50/50 but split and the even though the federal government would pay 90%. the states don't even want to pay the 10% they are also skeptical that the deal would remain that way. and they also say that by making

this expansion it also entices people who are currently eligible but haven't accessed it to access it which isn't a bad thing but which raises state costs and would also expand medicaid to other treatments which a lot of states currently don't cover. we can't afford even our portion of this and the reason we think it is unconstitutional is it forces us to take a deal rather than giving us a choice. they never argued this before. the program was created in the 1960's. there have been expansions of constantly over the years, so this is a rather difficult argument to make but not one that is unprecedented, and some people say the the challenges have at least a reasonable shot of living and it's an uphill battle. the government simply says, you know, medicaid has been on the books since 1965. states have always accepted the steel of the share program that

there is no reason now to say that it is coercive. also the argument is made that if the court struck this down could did jeopardize other federal payments to the states and other which there are lots of transfer programs money that goes from the state's for child welfare and other things and cut all of those be put into constitutional jeopardy if suddenly the court said this medicaid expansion shouldn't be allowed to this bernanke for an extensively about the supreme court oral argument and the debt coming decision you can read more at usa today.com and we thank you for joining us. >> thanks. appreciate it. now, oral argument on the expansion of the medicaid program. the court is examining whether the expansion of medicaid under the health care law would force the states to the loss of funding. solicitor general donald and

attorney paul clement argue before the court for 90 minutes. >> we will continue argument this afternoon. florida versus the department of health and human services. mr. clement? >> mr. chief justice and may i please the court the constitutionality of the expansion of medicaid depends on the answer to the related questions. first is the expansion coercive and second, does that conversion matter. >> can i ask you as a matter of clarification would you be making the same argument if instead of the federal government picking up 90% of the cost of the federal government picked up 100% of the cost? >> if everything remains the same we would be making this an

argument that really reduces to the question of to the gift the matter of coercion? in other words the federal government of here say we are giving you a boatload of money there are no matching funds requirements, there are no extraneous conditions attached to read it is just a boatload of federal money for you to to get to spend on poor people's health care. it doesn't sound crew were said to me i have to tell you. >> i want to make the point even if you are at a stand-alone program that gave 100 per cent nothing but the boat load to respect a stand-alone program, boatload of money, no matching funds is coercive? >> it is. but before i make that point let me simply say that we've built into the question the idea that there are no conditions, and of

course when you first asked if it is the 100% matching on the newly eligible mandatory individuals on the statute referred to come and that would have a very big condition and the condition is that the states in order to get that new money they would have to agree not only to the new conditions, but the government here is leveraging of their entire participation. >> let me give you a hypothetical. suppose i in employer and see someone i like and i want to hire that person and i'm going to give you $10 million a year to come work for me and the person says i've never been offered anywhere approaching $10 million a year. of course i'm going to say yes to that. we would agree that is not coercive. estimate i want to know where the money came from. [laughter] >> and offering $10 million a year to come work for me and you are saying this is anything but

a great choice? >> sure if i told you it came from my own bank account and that is what is going on here in part and it's not simply a matter of saying -- >> that cannot possibly be. when a taxpayer pays taxes to the federal government the person is asking as a citizen of the united states. when a taxpayer pays to the caprice taxes they are acting as a citizen of new york and new york can no more to the federal government what to do with the federal government money than the federal government can tell new york what to do with of the money that new york is collecting. >> of new york and the united states figure out a way to tax individuals that greater than 100 per cent of their in come the maybe you could say it is to separate taxes but we all know that in the real world of the extent of the federal government continues to increase taxes that decreases the ability of the states to tax their own citizenry. >> and on the federal government to tax. are you suggesting that a

certain point the states would have the claim because the federal government raising their taxes somehow the state's would feel coerced to lower their tax rate? >> no, i'm not. what i am suggesting is that it is not simply the case that you can say well, it's free money so you don't even have to ask whether the program as coercive. >> what percentage does it become coercive? meaning as i look at the figures i have seen, they are some states for whom the percentage of medicaid funding to the budget is close to 40% but there are others that are less than 10% and you say across the board of this is the worse it because no state even at 10% can give it at to respect the federal government can give because what you are saying to me is for a

bankrupt estate there is no gift a federal government could give them ever because it can only give them money without positions. how poorly the state is run no matter how much the federal government doesn't want to subsidize abortion or some other state obligation to the federal government can't give them 100% of their needs. >> justice sotomayor, i am saying the opposite which is that not every gift is the worse if the matter what the amount and no matter how small. i'm saying the opposite. there has to be a limit on conversion and the reason is quite simple because the court's entire spending power jurisprudence is premised on the notion that the spending power is different and congress can do things pursuant to the spending power that they can't do with its other enumerated power precisely because the programs are voluntary. and if you relax the assumption that they are voluntary and you were saying that they are conversion did you can't have to

respect let's say that the state doesn't want to face the voters and say instead of taking ten, 20, 30, 40% of the government budget and paying for it ourselves and giving up money for some other function that is what makes it coercive that it's unwilling to say that? >> maybe i can talk about the actual statute of the issue here and focusing on what i think are the three hallmarks of the statute that make it uniquely coercive. one of them is the fact that the statute is tied to the long voluntary individual mandate and that makes this unique but it makes it significant i think. i will continue. i thought you had a question to the second factor of course is the factor that congress here made a distinct and conscious decision to tie the state's

willingness to accept the funds to their antiyour participation in the statute even though the coverage for the newly eligible individuals is segregated for the rest of the program and this is a section 2001, page 23 of the appendix to the estimate is that true of every medicaid increase the each time it's decided like many years ago congress has added more people and has given more benefits and every time the condition is the medicaid program this is the program. >> this is distinct and two different directions. in some of the expansions of the program but not all. congress has made newly eligible individuals totally voluntary. the states want to cover the newly eligible individuals they will get additional money but if they don't, they don't trust any of their existing purchase a passion for guns. the 1972 program as a program of that creating the option for the states to participate. they talked about it in the

canyon case to read other expansions have to complete such as the 1984 expansion they didn't give the states that option but here's the second dimension in which this is the state which is here congress has created a separate part of the program for the newly eligible mandatory individuals. that's what they call them and those individuals are treated separately from the rest of the program going forward forever. they are going to be reimbursed at a different rate from everybody that's covered under the preexisting program. in light of the separation by congress itself, of the newly eligible individuals from the rest of the program, it's very hard to understand, chris's decision tuzee look if you don't want to cover the newly eligible individuals, you don't just not get the new money coming you don't get any of the money under the -- >> i'm sorry. where does it say that? ..

>> are we talking about the same thing? >> if that is the provision.

>> it says the secretary shall notify the state agency, if they don't comply, further payments will not be made to the state or in its discretion limited to categories not affected by such failure which bid to repeat centel was secretary is satisfied he shall limit payments to the state not affected by such favor with you. it is up to the secretary whether should the state decide to fund the new people, the secretary will cut off funding for the new people and if the secretary could go further. i would think, i cannot find

one case the secretary did but i would think the secretary could where that would be unreasonable since government action is governed by the general principle it must always be reasonable. where did the idea come from i don't want the new money? the secretary would or could cut off the old money? >> justice beyer it comes from the litigation what is coercive not that the guarantee that the secretary could but that she could. >> i will relieve you of that concern. the basic principle of the ministry of law law -- administration of law

and the secretary cut off your money, then they could show it is justified to be related to the state's refusal to take new money you would march into court to say the secretary is acting under reasonably and they are implicit as well as an explicit that the cutoff must be unreasonable. does that we leave you? >> it does not. >> i think it was. [laughter] >> i don't know the opinion to cite but the government has had opportunities at every level of the system and today to say if you do not want to take the new condition you just lose the new money.

>> but given the complexity of the act there is some money that is saved if the states take the new money and if they don't, there is money being spent that would not be spent there could be a pie alike that. the secretary could show that is reasonable. >> do you agree the government has to act reasonably? do we strike down unreasonable statutes? my god. [laughter] if the insect give pass to act reasonable but of the statute says the secretary could strike funding for the whole program that is the law unreasonable or not. >> that is how i read it.

mrs. not hypothetical. there is exhibits 33 to motion summary judgment. in the record in the litigation from the secretary to arizona when they floated the jt's to withdraw from the chip program. what they were told, if you withdraw you risk losing 7.8 billion dollars of your medicaid participation. >> i want to pursue this for one more minute. that just as scalia uses the same word as a statue and in those cases the court has said the secretary can do

anything that he or she once the limited to what is not arbitrary or capricious or abusive to interpret statutes. that is the end of my argument, end of my question and comment respond as you wish. [laughter] >> jurisprudence should not force howl all lower-court weeds holly hill. but with absolute certainty it gives the secretary the right to remove all funding under the programs. >> day think the federal government could not to say this does not work. we will recall it is not consistent with what the want to accomplish.

we willow do away with the system to start a new health care plan. you can take the new plan we will give about 20% less or more depending on congress doesn't have to continue the old system because that is what the state's rely upon and now is coercive? >> justice i am not saying we have a coercive right to purchase the paper co if congress scrap u coercion challenge. >> how do i draw the line? >> normally that definition is i don't have a choice. i am not sure it is not a

choice for the states. if they don't take medicaid but want to keep the coverage they have to make cuts to other services. that is a political choice. when do lament the right of government not to spend money the way they think it is an appropriate. >> justice sotomayor. what if congress starts of were with the new program? this is why it is coercive because congress does not say we want to scrap the program, they have not a complaint the way to the vision impaired that is why it is questionable with the donte our money we will take

the money you have been dependent upon the you serve the disabled and visually impaired. >> i asked another line. you represent 26 states? there are other states that like the expansion. and they are very glad to have it. the relief use the is to say the whole expansion is no good nevermind other states say they think it is good. because you represent a sizable number of states you could destroy the program even though there maybe other states that want it and do not feel coerced.

>> that is right but that should not be a concern because if congress wants to do what it did in 1972 to make a voluntary, every state cannot sign up. but 26 states who think this is a bad deal also say they have no choice they cannot afford to have entire participation of the program wiped out and go back to square one if to figure out how to do with the visually impaired and the disabled. >> is there any chance the 26 states opposing it have republican governors and those have democrat governors? >> there is a correlation of [laughter]

>> most colleges and universities are dependent on the deaf men to fund research programs and it has been going on for a long time. ben title nine past and government officials say if you want money for the physics class and everything else, then you have to create the athletic program and the recipient says i am coerced. now they are cannot giving it up 1/2 to except the program i do not want. why doesn't that work in a time?

if it is too good to give up. >> that could be different the line of coercion is only relevant when congress does something through the spending power it could not do directly. if it proposed title ix whether the 14th amendment allowed them to do that. you may think that it did bend your colleagues may take question with that. if congress can do it directly the fair case about funding. >> i tried to understand the coercion theory. we have never had in the history of this country in a federal program struck down because it was so good it becomes coercive.

>> the second thing about my a answer is spending on certain private universities is what congress can do. it does not matter. but they have states to expand. >> public colleges? >> then maybe some limits. but i am not sure that congress can do. but congress could not to as direct legislation say you must expand medicaid program. as a given the we have to ask if it is coercion. you say where is the case to cross the line? i would say this is the case be met also the 1980 extension children of 36

years ag and extension through age 18 those are just as big as the people coming on the role and governed by the same statute to that you complain about. >> justice i don't think the 1984 amendment. i am not saying absolutely but the one major difference is the size of the program. the expansion of medicated -- medicaid is breathtaking. the federal spending was over $21 billion. right now it is $250 billion. before the expansion under the statute. >> does that mean medicaid is uncontested 10 -- and

constitutional now? >> not necessarily. it is not no one trick pony. this statute is uniquely coercive. the sheer size of the program look at the government's own number. >> when does it become too big? give me add dollar sign number. >> 3.3 trillion dollars over the next 10 members. >> i did look of this number the amount approximately as a percentage of gdp is big. it was 2% then goes up over 3% now the comparable numbers is the expansion up at 18 4/6 years old.

it is pretty hard to argue their not roughly comparable as of percentage of gdp. if i am right or roughly right, then do you have to say medicaid has been unconstitutional since 1964? >> no. because three things. >> what are the second and third? [laughter] >> exactly. the sheer size. number two is the statute is tied to the individual mandate that is not voluntary. number three they leverage prior participation as separately segregated going forward. >> on the third if you have the current program and

congress says there is too much fraud and abuse we put new conditions on how the state uses the money. is tied to everything in there. >> that is constitutional because congress can do that directly. there is a statute in the criminal code it is tied to spending but i don't think that is not called into question. >> congress can legislate fraud and abuse and coverage expansion. >> justice kagan i think there is a difference then congress passed to breakdown two pieces as opposed 3.3 trillion dollars before the

expansion is not the end of the world. but the focus on the new the eligible people. healthy, adults, no children, not normally covered. a separate program how you are reimbursed comment differently than all previous individuals. if you don't take the money we take away money from the visually impaired and disability. >> my problem with your argument is the bigger the problem and more resources it needs we will tie the hands of the federal government to choose how to structure the cooperative of the government to say the bigger the problem the less

the powers. once you give that much money commute cannot structure the program the way you want. it is our money. we have to run the program ourself to protect our interests. where do we draw the line? the uninsured is a problem for the state's because they cannot let the poor guy. they don't want to do that because they feel accountable to the citizenry. they have to spend money to do their way if not the federal way. i don't understand the logic

to say state, you're not entitled to our many, the more you take, the more how are you have. >> justice sotomayor that mr. ascribes one happened with medicaid. states were providing for the poor before medicaid came along. then the government says we will help you and give you money fallen to barely. then they get more money and more conditions now they say you have to give up the prior program where we offered cooperation and now given up if you don't take the new conditions. also passed a certain level it becomes coercive per se but when you tell the states read take away 3.3 trillion dollars over 10 years it is

okay to insist congress be more careful not be so aggressively coercive as it was. we're not here to say it is easy to draw the line but it is important to draw the line. it should be easy to establish the line to say there are three pieces that make it more coercive then you have ever seen then you will have instructed congress there are limits to the rules. >> the chief justice does not always check. [laughter] as i recall your theory comment to determine whether something is coercive how much you are threatened with

losing order offered it to receive, i don't think that is realistic. just like jack benny your money or your life. it is not a choice. no coercion. right? but if it is your life or your wife? that is a lot harder. isn't coercive in both situations? >> yes. it is. >> really? [laughter] >> is a tough choice. >> i thought you were going to say it is your money and your life. [laughter] >> i might have missed something.

[laughter] >> no, no, no to say you are coerced you are give been an offer you cannot reduce i could refuse my life for my wife. [laughter] >> he is not going home tonight. >> i am talking about my wife. take mind. [laughter] >> forget about that example. [laughter] i want to make sure i and stand the meeting fullness of the choice is taken away. the amount offered so much you cannot turn it down or the amount that is taken away? >> both. is three strings. the sheer amount of money

makes it very, very difficult to refuse. it is not from china or the export tariffs like in the old days. and they have to give up the continuing purchase a patient they have been participating and 45 years. >> why isn't that a consequence they have been willing to take the federal government's money? it seems they have compromised their status as the independent sovereign they should not be surprised they tied the strings they should not be surprised the federal government would pull them. >> with all the respect we could not say the state has got dependent so-called

federal it -- federalism thing off. the consequence to say we're not crossing the local version nine that to give them limited spending power, it should be a few cannot police this then you should reconsider the case that congress can spend money on what it cannot do directly. we say your case depend on their being a line between commercial and. >> i don't understand the first answer to justice kagan. there is not a difference with the federal government to say we want to take care of the poor and we pay one 90% of the cost. you say that is coercion. isn't the bird been that the state takes helps in the

equations? >> it could justice sotomayor i did not mean to suggest my case was no better than that hypothetical but i do think the amount of money considered a loan does make a difference because it has the effect on the ability to raise revenue for their own citizens. it is not just the free money. >> go back to what the state pays to what it gets, florida loses. the citizens pay out much less than what they get back. you really cannot make the argument or a cannot ask from more than it gives because it gives less than it receives. >> i make that on behalf of texas.

that is not what my argument depends on. it is what it makes it uniquely coercive. what explains the idea if you don't take the money you lose all money of the prior 45 years? noboby in congress wants to stop helping the visually impaired or disabled it is leverage coercive plain and simple. >> if the inevitable consequence is the federal government could do it on its own medicated/medicare medicated/medicare/insurance regulators, then how in the interest of whether lonesome concerned with huge federal bureaucracy -- fair proceeds do with this have done?

>> i have thought about that. the one word answer is accountability. if the federal government wants to spend money for the citizens can bring a complaint to a federal official in a federal agency. what is so pernicious the government knows they will not take lightly the new federal bureaucracy is popping up across the country so they have the benefit of the minister ring the program through state officials do they complained to the state official. >> that is very confusing. media behind the cooperative programs is the federalism idea to give the states the ability of flexibility and that is what medicaid is.

>> that is what it was. what will it be going forward? i take your point*. cooperative federalism is beautiful but mandatory is directed. >> that does not mean no federal mandates are restrictions in a program that uses 90% year or 100% federal money. there is flexibility that the government has a helen wishes the money to be used. it is like a gift certificate for one store buchanan use it for different things. >> i absolutely agree with it is cooperative and the states have choices it is perfectly okay. that is why a if it is voluntary is so important.